Home Health Care Catalent in deal to buy gene therapy contract manufacturer Paragon for $1.2B

Catalent in deal to buy gene therapy contract manufacturer Paragon for $1.2B

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A company that makes drug-delivery and development technology is making a big bet on the projected future growth of gene therapy in the US.

Somerset, New Jersey-based Catalent said Monday it would acquire Paragon Bioservices, a Baltimore-based contract manufacturing organization focused on viral vectors used in gene therapies, for $1.2 billion. The companies estimate that Paragon will have the ability to capitalize on a gene therapy market worth up to $40 billion, particularly with its expertise in adeno-associated viral, or AAV vectors, which are the most commonly used delivery system for gene therapy. It also has capabilities in lentiviral vectors and GMP plasmids.

The deal comes just weeks after scientific research products manufacturer Thermo Fisher said it would buy another gene therapy-focused contract manufacturer, Cambridge, Massachusetts-based Brammer Bio, for $1.7 billion.

Paragon’s unparalleled expertise in the rapidly growing market of gene therapy manufacturing will be a transformative addition to our business that we believe will accelerate our long-term growth,” Catalent CEO John Chiminski said in a statement. “Paragon brings to Catalent a complementary capability that will fundamentally enhance our biologics business and our end-to-end integrated biopharmaceutical solutions for customers.”

The only gene therapy currently marketed in the US, Spark Therapeutics’ Luxturna (voretigene neparvovec-rzyl), for a rare form of inherited blindness, is an AAV-based product, as are most of the gene therapies currently in clinical development. Meanwhile, bluebird bio’s Zynteglo, under consideration by the European Commission for approval in the blood disorder beta-thalassemia, is a lentiviral-based therapy.

Bluebird has a longstanding relationship with another contract manufacturer that does work in gene therapy, Switzerland-based Lonza, and recently opened its own manufacturing plant for gene and also cell therapies. At an investor conference in New York last month, panelists in a discussion about manufacturing mostly agreed that in-house manufacturing is preferable to reliance on contract manufacturers. Speakers in a panel at the B. Riley Healthcare Conference in September voiced similar opinions, saying that in-house manufacturing allows for greater flexibility and lowers long-term costs. By contrast, reliance on contract manufacturers is common in the early stages of development, but the need for scale – especially in later stages of development and commercialization – requires a transition to companies manufacturing products themselves.

Photo: Kritchanut, Getty Images

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